Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's biggest supplier of made-to-order chips, expects chip prices to rebound in this quarter after some five quarters of stagnation, boosted primarily by strong demand for consumer electronics, company chairman Morris Chang (張忠謀) said yesterday.
With strong demand for DVD players and set-top boxes, which convert digital cable signals for analog TVs, Chang said average selling prices should rise by 3 percent to 5 percent in the second quarter.
Forecasts predict that demand will exceed supply, Chang told investors yesterday.
At capacity
The chipmaker's facilities will be fully utilized this quarter, he said. The company's capital spending will remain unchanged at US$2 billion for this year, but there is room to grow, Chang said.
During the same period, he said, wafer shipments will grow by 10 percent after a 4-percent jump in the first quarter.
As a result, TSMC's gross margin will climb by about 5 percent to exceed 45 percent in the three months to June 30.
The company said earlier this week that first-quarter earnings quadrupled to NT$18.79 billion, or NT$0.93 a share, from a year ago, on higher revenue of NT$57.51 billion.
Given the strong results for the quarter, TSMC chief financial executive Lora Ho (
For next year, Chang said it was too early to see a cyclical downturn as it usually takes five to six years to go from peak to trough.
He said he still believes the global semiconductor industry will grow at a 10-percent annual rate from now to 2007 and that the foundry business will outpace that growth.
Revenue growth
According to an estimate by Chris Hsieh (
"It's a reasonable growth rate, based on Chang's guidance," Hsieh said.
But the growth pace will be slightly slower than that of TSMC's smaller rival United Microelectronics Corp (UMC,
The world's No.2 contract chipmaker is expected to record 18 percent growth, said Hsieh, who raised his projection from 15 percent.
Commenting on TSMC's success in winning approval from the government to set up a less advanced plant in China, Hsieh gave his thumbs-up.
"It's big progress TSMC has made to tap in to China's semiconductor market, though the Chinese fab will not start to contribute much for at least one to two years," Hsieh said.
Despite strong performance in the first quarter, TSMC shares fell 4.96 percent to NT$57.5 yesterday on the TAIEX, as investors showed concern over China's plan to cool down its overheating economy.
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